Note: The usual disclaimers apply. I’m only relating my experience, and this post is more of a reminder to myself than anything else. If you find it useful – awesome, and if not then no worries.
A while back my wife called me to tell me that the timeshare company was asking for $1,200 to take the timeshare back from us. She had looked at the possibility of donation, but this still seemed like the best route to get rid of the damn thing. So we paid the $1,200 and considered ourselves supremely lucky to have a timeshare company (the only one we’ve come across) that could take this beast back. This marked the last timeshare payment that I would make and a lesson for timeshare ownership (I’m writing this post to remind me of this lesson).
Wikipedia does a good job of explaining the definition of a timeshare and all its problems. We bought ours while on a ski trip in the early 2000s. The sales pitch lured us in with a price ($7,800) that seemed reasonable and maintenance (about $400 per year at the time) that looked like a good deal for what we got.
The event that clinched the sale was not the salesperson but rather this family that we saw on the ski slopes. They had three boys and we just started chatting with them and mentioned the possibility of purchasing a timeshare. They said they had two timeshares, and it was a great thing to do when you have a family. The key point for them was that they could always vacation at a place with a kitchen and that this helped in making the kids comfortable. Event though we didn’t have kids at the time, it still sounded like a good idea.
For the first few years, it seemed to work for us. We ended up doing timeshare exchanges all of the time to go on a yearly vacation in Tahoe. Our unit was not in a good exchange zone (i.e. it was a great skiing unit for a week in the spring). So besides the Interval exchange fees and the Interval membership, there was also the issue that we couldn’t get great exchanges during the winter months. We did ok because our vacation time was flexible (before having a child).
As Wikipedia states about exchange timeshares:
Due to the promise of exchange, these units, called “vacation ownership” by the industry, often sell regardless of their deeded resort (most are deeded into a certain resort site, though other forms of use do exist). What is not often disclosed is that all differ in trading power. If a resort is in Hawaii or Southern California, it will exchange extremely well; however, those areas are some of the most expensive in the world, subject to demand typical of a heavily trafficked vacation area.
Most timeshares will have somewhat crappy trading power which means that you’ll be giving away money on a yearly basis to exchange companies such as RCI and Interval International beside your regular maintenance fees.
You may have significant flexibility when you are single or as a couple without kids. This means that you can choose a not-so-popular week for an exchange and get a location that you desire for your vacation. However, when you have kids, the timeshare equation goes from bad to worst. The problem is that dates for school breaks are common across most schools systems. So you end up competing for travel destinations that thousands of other families want to use, and you end up losing. Either you can’t find an exchange, or you end up with a really bad exchange. The most likely scenario, however, is that you can’t find an exchange, so you end up finding a hotel and vacationing in the very way that timeshares were supposed to help you. So now you’ve spent money for a vacation on top of the timeshare maintenance without even using the timeshare (crazy isn’t it?).
I’ve gotten tons of timeshare sales pitches. It seems that because I was a timeshare owner, timeshare companies seem to fall over themselves to give me their pitch when I’m visiting a resort. I suspect that their internal data indicates that timeshare owners are more likely to buy more timeshares.
The typical timeshare sales pitch starts by asking you the value of your time. Then it proceeds with a pitch to your heart string about family, vacationing, and connection. The pitch is that you’re guaranteeing future time with your loved ones through a timeshare. And the older you are, the more the pitch tilts towards your child/children – “your child will have an asset and a way to vacation…you’ll be locking in these savings forever…don’t you want your child to be free of vacation burdens?” (the way I see it is that my child is free to vacation wherever, whenever and to whatever extent they can and mechanisms like Airbnb abound; besides this is leisure time and my child is responsible for their leisure time in the same way that they’re responsible to entertain themselves when they’re ‘bored’)
The sales pitch is very hardcore, and I would say it is much worse than the stereotypical used car salesman pitch (so if want to warm up for an upcoming timeshare sales pitch, then you should visit your local used car dealer and see how well you deal with that). At least with a used car salesman – you may end up with a car that isn’t a lemon. Furthermore, the used car dealer doesn’t send you a bill every year. With timeshare sales, you end up with something that keeps sucking cash out of your wallet on a yearly basis besides the initial up-front cost (don’t forget to add exchange fees if you’re trading for a particular time/destination). Wikipedia’s article hits the nail on the head with:
The industry’s reputation has been severely injured by the comparison of the timeshare salesman to the used car salesman; because of the sales pressure put on the prospective buyer to “buy today”. “The discounted price I quoted you is only good if you buy today”; is the industry standard’s pitch to close the sale on the first visit to the resort. Many have left a timeshare tour complaining of being exhausted by the barrage of salespeople they had to deal with before they finally exited the “Tour”. The term “TO”, or “Turn Over” man, was coined in the industry. Once the original tour guide or salesman gives the prospective buyer the pitch and price, the “TO” is sent in to drop the price and secure the down payment.
In a recent timeshare pitch the salesperson labeled my former timeshare as a “dinosaur” because it was an inflexible exchange week, as compared to the flexible points system that he was selling (in this case it was RCI Platinum Points). There was, of course, the $1,500 yearly maintenance fee besides the upfront cost of $15,000 and the fact that the points would never add up to a full week for the vacation times that we would take (again – based on school times).
The biggest problem that we had with our timeshare was that we had a tough time to get rid of it. The web is littered with timeshare sales. Desperate owners that want to get rid of this yearly liability. After all, if you stop paying that maintenance fee then you’ll get a collection company after you and you credit score will be hit (so good luck with good old home buying, car buying, or any other large purchases).
Wikipedia sums this up best:
- From :
However, the biggest complaint of all is the fact that timeshare re-selling by the private owner is almost impossible to do. An owner looking to sell literally cannot give the timeshare away. Timeshare resale companies have sprung up that actually charge the owner to assume his/her timeshare ownership, using the excuse that the resale company must assume the maintenance fees until that burden can be unloaded to a new buyer.
- From :
It is more than likely that a new timeshare owner could have purchased the same product from an existing owner on the timeshare resale market for between 0 and 15% of what he/she paid from the developer, simply by doing a computer search. In many cases, the exact or similar accommodation purchased, will be happily transferred by an unhappy timeshare owner. The new buyer usually pays nothing, other than to take over the existing maintenance fees, because the existing owner can’t find a buyer for his/her timeshare without paying a resale company thousands of dollars to absorb it for resale. The reason for this anomaly is that the lion’s share of the cost of a new timeshare are sales commissions and marketing overhead, and cannot be retrieved by the timeshare owner.
You have to do your own research of course, but in my opinion – timeshares are a terrible use of money. They’re not an investment in any sense of the word. No matter the form and the sales pitch, they are a constant drain on your wallet. Year in and year out they’re pocket sharks that keep chomping away at your hard earned dollars.
Now if you do end up in a timeshare presentation and your emotions and sentimentality are put to the test, and you are desperate to get out of this sales-y tarpit – here’s a question that has worked really well for me:
“Your sales pitch sounds tempting but let me ask you this – if this timeshare doesn’t work out for me – will you take it back? Can I completely get rid of it? You’ve said it is an asset and a great thing to own, so taking it back shouldn’t be a problem…should it?”
In my experience, this is the question that no timeshare salesperson can spin or answer in a positive way. Typically the salesperson’s face turns just a little, he/she may even look away. Then they’ll quietly answer with ‘no’ and then enthusiastically they’ll tell you about the great deal that you are getting and how future generations will benefit from your wise choice.
Now I know – you’re thinking “wait…didn’t you just say at the beginning of your post that your timeshare company took it back?” And the answer is ‘yes’ – they took it back at this point in time. I was lucky and the company stated that they were looking to discontinue this option. So don’t confuse my dumb luck with the possibility of timeshare awesomeness.
If you’re looking for alternatives to timeshares here are some that come to mind (I’m sure there are many more out there):